Ingram Said to Be Buying European Firm

Technology: The Santa Ana distributor declines to confirm deal to acquire the continent's largest computer retailer.

Looking to broaden its already formidable expansion into Europe, Ingram Micro Inc. reportedly has agreed to buy the continent's largest computer retailer for about $556 million.

Vobis Microcomputer AG, which is owned by Cologne-based Metro AG, has 820 stores in 11 European countries. The German newspaper Die Welt reported the deal in Friday's editions, citing unnamed sources.

Officials at Santa Ana-based Ingram, the world's largest computer distributor with $16.5 billion in annual sales, declined to comment. Metro AG officials also declined to comment.

The Wall Street Journal's European edition reported Friday that Ingram is one of two companies negotiating to buy Vobis, the other being Miami-based CHS Electronics Inc. CHS said that while it doesn't comment on rumors, "it's not our strategy or business plan to enter into retailing operations," said Martin Gitlin, spokesman for the company.

Vobis also has a sizable wholesale operation.

For Ingram, the deal--if completed--represents another big step in its expansion across Europe.

On Wednesday, the company announced plans to build a 550,000-square-foot warehouse and shipping center in the Netherlands.

And earlier this month, Ingram agreed to buy Tech Data Corp.'s majority interest in German computer products distributor Macrotron AG for $100 million in cash.

"International cooperations are necessary in the technology sector to increase the trading markets," said Werner Lykowsky, who helps to manage $6 billion in German stocks and bonds at Helaba Invest Kapitalanlagegesellschaft mbH in Frankfurt.

Ingram's stock closed Friday at $41.38, down 88 cents, in New York Stock Exchange trading.

CHS also is expanding in Europe. This week, it won approval from the European Commission for its $87.7-million stock acquisition of Metrologie International SA, a distributor of computer hardware in France, the United Kingdom and Spain.

Despite its size, Vobis' profits have slumped as computers increasingly have become a commodity in Europe, available even in supermarkets.

Its 1997 pretax profit fell about 20%, to about $21 million. The company said earlier this year it expects 1998 sales to total about $3.3 billion, with profits improving slightly.

"This particular business area is posing problems," said Albrecht Denninghoff, an analyst at Oppenheim Finanzanalyse. "Other shops are cheaper and have more showroom space."